US mortgage applications dive 6.9% to lowest in 28 years

30-year fixed mortgage rate rises for 6th consecutive week to 7.7%, highest since November 2000

By Ovunc Kutlu

ISTANBUL (AA) - US mortgage applications fell last week to their lowest in 28 years, as mortgage interest rates rose further, according to a report Wednesday by the Mortgage Bankers Association (MBA).

The Market Composite Index, a measure of mortgage loan application volume, fell 6.9% on a seasonally adjusted basis for the week ending Oct. 13 compared to the previous week. On an unadjusted basis, the index also declined 7%.

“Applications decreased to their lowest level since 1995, as the 30-year fixed mortgage rate increased for the sixth consecutive week to 7.70 percent – the highest level since November 2000," MBA Vice President and Deputy Chief Economist Joel Kan said in a statement.

"Purchase applications were 21 percent lower than the same week last year, as homebuying activity continues to pull back given reduced purchasing power from higher rates and the ongoing lack of available inventory," he added.

The average contract interest rate for a 15-year fixed-rate mortgage increased to 6.98% from 6.97%.

The MBA survey covers more than 75% of US retail residential mortgage applications.

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